Medical care company to bring more than 300 jobs to Tyler

Published 5:09 pm Wednesday, August 26, 2015

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Fresenius Medical Care North America, a multinational health care corporation, will bring 300 to 350 new jobs to Tyler, along with an $11 million standalone medical administration facility at the intersection of Loop 323 and Earl Campbell Parkway.

The firm also will relocate as many as 140 existing employees to the Tyler facility, which will provide administrative services to the more than 2,150 dialysis facilities in the U.S. with three in Tyler, and 3,361 facilities worldwide.

These are high-paying medical administration jobs, paying an average of $45,000 to $50,000 in salary and benefits, officials said.

Tom Mullins, president and CEO of the Tyler Economic Development Council, and Assistant City Manager Susan Guthrie presented the project to the Tyler City Council Wednesday morning.

“We are very excited that you are expanding in our community,” Mayor Martin Heines told company representatives. “These are the type of jobs that we have identified in our industry growth initiative. It’s very important that we reach out to companies like yours – good quality organizations – and try to (bring them) to our town. Thank you, for selecting us and we look forward to being your partner.”

Ms. Guthrie said part of Tyler’s long range plan is a growth initiative strategy, which looks at ways the community can attract and create jobs based on its strengths, including education and medical industries.

“One goal is to be an innovation economy,” she said. “We don’t need to have a factory with smoke plumes to be a healthy economy. There are a lot of industries that we can attract that are good jobs in our economy.”

A comprehensive financial incentive package helped sway Fresenius, according to Charles Newth, the firm’s director of real estate.

“The financial package was just fantastic,” he said. “The work that (Chamber head) Tom (Mullins’) team did was really great. I think it really came down to that.”

The package has two parts. The first is a property tax abatement totaling $587,942 over seven years. The city’s portion of that is $172,480. The Tyler City Council has not yet voted on the abatement, but Ms. Guthrie said it will in coming weeks.

A tax abatement agreement means that taxing entities (the city, county and Tyler Junior College) agree to forego property tax on a new facility for a set number of years. The logic behind tax abatement is that by enticing companies to relocate, taxing entities ensure future revenues – after seven years, in this case, those taxing entities will start collecting property taxes, and the facility will be a positive addition to the tax rolls. Had Fresenius chosen to locate the facility in Phoenix, local taxing entities here would never have seen a dime.

The second part of the package is direct city incentives, totaling $820,515 over seven years. Those incentives – which can be cash payments, or credit to the company for water, sewer or infrastructure projects, as well as fees – are tied to job numbers. In 2015, for instance, Fresenius is eligible for $32,500 in incentives from the city of Tyler, but that’s dependent on the firm adding 20 jobs. In 2016, the firm will be eligible for $220,500, dependent on adding 125 jobs. Eventually, the agreement calls for 400 jobs total.

The Tyler Economic Development Council will audit the firm yearly to ensure the jobs have been added.

Any incentive cash, apart from credits, would from either the general fund or water utilities funds. Mayor Heines added that there’s some funding set aside in enterprise funds that has never been spent.

“No incentives are paid out until the jobs are verified,” Mayor Heines said. “It’s our understanding we did not have the largest incentive package before this company. Tyler was just a very good fit for this company.”

There’s a real estate matter that Tyler Junior College will take up on Thursday. TJC owns a portion of land at the site that Fresenius needs. The TJC board will vote on whether to sell the land to the company.

“We’re really excited about this,” TJC President Dr. Mike Metke said. “This has been a really closely held secret, as it’s been coming together. From everything we’ve seen, this is a great company, with a history that goes back to before Columbus. It’s a really great opportunity for Tyler.”

Fresenius, based in Bad Hamburg, Germany, traces its roots to a 15th Century pharmacy in Frankfurt.

The new 80,000-square-foot, two-story office facility will occupy 9.2 acres near Suddenlink Communications on the west Loop. Construction is planned to start this fall and is projected to be complete by late 2016 or early 2017.

Mullins said there were some other factors that made Tyler a more attractive location for the incoming company.

“They had a workforce here already that they were happy with, the cost of living will be less in a small city like Tyler than in a big urban center and we had the great connection with the education community,” Mullins said. “Tyler Junior College, Tyler ISD and Texas College already provide medical tech programs, so there will be people in the pipeline that will be looked at and hired by this company.”

Metke said TJC will work closely with Fresenius to train workers for the various medical administration positions that will open.

For his part, Newth agreed that having TJC nearby, and with TJC’s existing medical training programs, is a big plus.

“That’s just an added benefit for us,” Newth said. “We’ve done studies, and we see the greater Tyler area as having a great pool for [potential] employees.”

The total economic impact of the new project on the Tyler area is estimated to be $62 million over the first 10 years.

“This is going to be an exciting time for Tyler,” Heines said. “At the end of the day, it’s all about providing good jobs for our community, and that’s what is happening.”

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